Californian Milestone Payment Regulation
The Californian Government requires that the money sent or received by users residing in California goes through an independent and licensed escrow payment service.
An escrow is a financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction. It makes transactions more secure by keeping the payment in a secure account which is only released when all of the terms of the agreement are met, as overseen by the escrow company.
Since Milestone Payments are now regarded as a regulated escrow activity, for us to continue to serve our Californian users, Escrow.com, a business owned and separately operated by the Freelancer Group to process escrow payments, will facilitate escrow transactions on behalf of a client and/or a freelancer who is a California user.
Users are not required to create an Escrow.com account to complete transactions with Californian users on the site, but will be required to complete their Freelancer.com profile and agree to both the General Escrow Instructions and the Freelancer.com User Agreement.
● Freelancers will be required to do this when bidding on a project from a Californian client.
● Clients will be required when they create a Milestone Payment for a Californian freelancer.
Escrow.com only supports these currencies at the moment: USD, EUR, AUD, and GBP. With this payment regulation, we limited the Californian clients’ projects only with the same currencies, too.
The most noticeable change involving Californian projects is the Pending in Escrow status of Milestone Payments. This status comes after a client releases a Milestone Payment. This means that the payment is being cleared on Escrow.com's side. Clearing usually takes 1-3 business days.
Note that KYC verification may be required on some transactions for security and compliance purposes.